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ISPAT INDUSTRIES
CMP (Rs.):24.15 EPS (Rs.): 0.00 52 Week High : 26.20
MCap (Rs. Cr.): 3133 Book Value(Rs.): -2.52 52 Week Low : 15.25
Fundamental View :
JSW has acquired 41% stake in ISPAT for Rs21.5bn. Ispat is currently operating at
utilisation levels of 80% and generates EBIDTA/ton of USD70. The company needs to
revamp its operations to increase the profitability.
Ispat Industries Ltd proposes to push the projects whose implementation has been
delayed by the recent meltdown. The projects include coke oven plant at a cost of Rs
1,100 crore, power plant at Rs 490 crore and mining projects at Rs 120 crore. Except the
mining project, the two others will be implemented in partnership with others. The
company said that 110 MW (55 MWx2) plant would be commissioned by the middle of
next year while the coke oven plant by the middle of 2012.
Ispat Industries is aiming to raise output to 4.2 million tonnes per annum from 3.3 million
tonnes per annum.
Outlook: Rising debt is a major concern.
Technical View:
In the daily charts the stock is above its 25 DMA which is at 22.65. The 14 day RSI is 59.10,
MACD on daily charts is 0.77. The stock is above its 200 DMA which is at 20.38.
Recommendations:
The stock has risen more than 3% this week and it trades very close to major resistance of
26.50. Once breakout above this level happens there can be more upside to this stock but
until that only sideways trading inside 25-22 levels is expected.
@Religare: rising debt is the main concern at this point of time.
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